Savills Monaco Property Blog - The Tiny City-State of Monaco is Expanding

The tiny city-state of Monaco is expanding – at least in terms of the choice of luxury homes on offer in this prestigious principality by the Mediterranean Sea. There are now more new residential schemes being constructed here than ever before and, in a buoyant market that remained relatively stable during the pandemic, we are seeing demand from a new kind of buyer.

With eyes firmly focused on new build, these buyers want to live in a modern building that offers exclusive services. Below are five developments that will be completing over the coming years.

Mareterra
Neighbourhood: Larvotto

The most requested new development is the eagerly anticipated Mareterra land extension. This exciting project will have 110 apartments and 10 luxury villas, some of which will be front line to the sea with uninterrupted views over the Mediterranean. Environmental factors are central to the design. There will be green parkland and open spaces allowing residents and visitors to feel connected with nature. Eco-friendly features include a rainwater recovery system and photovoltaic energy panels. Find out more

Bay House Monaco
Neighbourhood: Larvotto

Bay House is a new development in the ultra-exclusive Larvotto district of Monaco, an area that saw an average price per square metre in 2020 of €65,000. This development delivers on the new wave of high expectations for modern and luxurious services. Benefits for residents include outstanding sea views, a luxurious pool and wellness centre, concierge, dry cleaning, valet and more. Find out more

L’Exotique
Neighbourhood: Jardin Exotique

L’Exotique takes its name from the district Jardin Exotique located in the heights of the west side of Monaco, and has been designed by award-winning French architect/engineer Rudy Ricciotti, famous for the MUCEM museum in Marseille. It’s designed to be consistent with the natural Mediterranean backdrop, incorporating stone and wood throughout. Jardin Exotique has some of the best views in the principality and the building will also have a wellness centre, a heated swimming pool and plenty of underground parking. Find out more

Villa Palazzino
Neighbourhood: Monte-Carlo

Villa Palazzino is a new development coming soon to the famous beating heart of Monaco - Monte-Carlo, an area famous for world class shopping, hotels, restaurants and casinos. The building, which stays true to the beautiful bourgeoisie architecture found throughout the principality, comprises 19 luxury apartments and four town houses. Residents will benefit from a 24/7 concierge and security. The two penthouses will have access to an exclusive rooftop swimming pool. Find out more

Villa Portofino
Neighbourhood: Condamine

Villa Portofino, a name that conjures up Italian glamour, elegance and excellence, will offer exactly that to potential buyers in Monaco. The development has a fantastic location in the vibrant Condamine district which runs parallel to the dynamic Port Hercules and is ideally located for Monte-Carlo and Fontvieille. Emmanuel Deverini is the architect who has been instructed to create a timeless, chic new development that will fit in seamlessly with the area’s architectural backdrop. Find out more

Blevins Franks Financial Tips - Investing Responsibly - Earning Returns While Helping the Environment and Society

The news was dominated recently by the COP26 meeting in Glasgow and the environmental issues affecting the planet and our daily lives.  It came at a time when many of us were already thinking about what changes we can make to play our part in improving the situation. The topic of ‘ESG investing’ – Environmental, Social, Governance – was highlighted over the fortnight and it is something many investors are keen to explore. 

The November COP26 (26th Conference of the Parties) was a global United Nations summit about climate change and how countries can bring it under control.  Large companies also need to play their part to reduce their impact on the environment, and this is where investors can be selective over which companies to buy shares in.

Interest in ESG investment has been growing noticeably over recent years. Investors are placing greater emphasis on the environmental and social impact of their investments, wanting to make sure the firms benefiting from their capital do not contribute to problems like climate change, inequality etc. They are increasingly seeking to manage to exposure to ESG factors, while generating sustainable long-term returns – responsible investing and performance can be complementary.  

It is estimated that around 20% of global investors have some ESG investments and almost 50% say they are interested. 

ESG investing 

This type of responsible investing prioritises financial returns alongside a company’s impact on the environment, its stakeholders and society.  Here are some simple definitions:

·      Environmental – The impact of a company’s activities on the environment: carbon footprint, greenhouse gas emissions, renewable energy usage, using a sustainable supply chain etc. Positive outcomes include managing resources and executing environmental reporting/disclosure, or avoiding/minimising environmental liabilities such as climate impact or pollution.

·      Social – A company’s impact on its employees, customers, consumers, suppliers and the local community: how employees are treated, racial diversity among staff and executives, LGBTQ+ equality, inclusion programmes etc.  Positive outcomes include increasing health, productivity, and morale, or reducing negative outcomes such as high turnover and absenteeism.

·      Governance – The way companies are run: how does the management drive positive change?  What are its business ethics?  Positive outcomes include aligning interests of shareowners and management, improving diversity and accountability, and avoiding unpleasant financial surprises, such as excessive executive remuneration.

In summary, ESG investing considers how a company serves its staff, communities, customers, stakeholders and the environment. 

These days, most public companies, as well as many private ones, are evaluated and rated on their ESG performance by various third-party providers of reports and ratings. These include Bloomberg, S&P Dow Jones Indices and MSCI.   

Institutional investors, asset managers, financial institutions and other stakeholders are increasingly relying on these reports and ratings to assess and measure companies’ ESG performance compared to peers.

ESG performance 

Investing responsibly does not mean you have to accept lower returns.  

ESG investing is building up a good track record, with noteworthy performance over the pandemic. During the market turbulence and uncertainty, many companies with strong ESG track records showed lower volatility than others  and investors turned to ESG for increased resiliency.   According to US financial services firm Morningstar, the last quarter of 2020 saw record sales of $152 billion and total assets invested worldwide reached $1.6 trillion. 

Analysis by Morningstar also found that, over a decade, 80% of equity funds investing in sustainability outperform traditional funds. ESG funds also show longevity – 77% of ESG funds that existed 10 years ago survived, compared to 46% of traditional funds.  

Investment planning 

You do not need to spend hours researching a company’s ESG track record and scores, or comparing its share price with other companies to try and work out which ones to invest in.   As with other capital investments, you can buy funds which invest in highly rated companies. This also reduces risk as it provides much more diversification.  

Apply the same investment principles with ESG investing as with all other capital investments: 

1.     Establish your objectives and time horizon.

2.     Obtain an objective analysis of your appetite for risk. 

3.     Have a mix of assets and sectors in your portfolio to reduce the risk of one area performing badly.  

4.     When considering a new investment, analyse how it fits in with the rest of your portfolio and impacts its risk weighting. 

5.     Conduct regular reviews, around once a year.  

 You can choose to use a financial advisory company that incorporates responsible investing within its advisory services. Some companies now look at ESG considerations, as well as traditional assessments, as a part of the overall investment considerations when assessing suitability of investments for clients.  

So responsible investing does not have to involve more work on your part, and you can invest as you normally would, without compromising returns or your risk weightings – but with the difference being which companies benefit from your investment capital.  You don’t need to focus all your portfolio on ESG funds – indeed, you need a good spread of assets to reduce risk – but it is one step you can take to help protect our environment and society. 

All advice received from Blevins Franks is personalised and provided in writing. This article, however, should not be construed as providing any personalised investment advice.  The value of investments can fall as well as rise, as can the income arising from them. Past performance should not be seen as an indication of future performance.

You can find other financial advisory articles by visiting our website here

Blevins Franks Financial Tips - UK Based Financial Advice and Services Post Brexit - Four Important Considerations

As we move towards the end of 2021,Brexit is no longer a novelty, but we are still learning exactly how we are or may be affected.  While in many ways day-to-day life hasn’t changed for British expatriates, there are some inconveniences – some minor, some not so minor. 

One Brexit consequence that is causing concern and difficulties for many UK nationals in France, is financial advice and services – we are receiving a lot of questions about it. 

The Brexit trade deal did not cover financial services, which meant the previous ‘passporting’ regime came to an end on 31 December 2020.   While post-Brexit negotiations could change things in the future, you do need to establish if your financial planning – and adviser – will stand up to the challenges that Brexit brings today. Here are four key considerations.

1.     The end of passporting

If you have a good relationship with your UK-based financial adviser, you may understandably wish to continue using them, despite now living in a different country. However, you need to make sure they can legally continue to advise you now that the UK is no longer an EU member state. 

Until the end of 2020, UK-based financial businesses could ‘passport’ out of the UK and into Europe – but since 1 January 2021, this no longer applies.  

‘Passporting’ enables cross-border transactions between EU member states through shared financial regulation. It was previously possible because the UK Financial Conduct Authority (FCA) was bound by the same rules and standards as other regulators in the EU. Now the UK has left the EU, the regulation of financial activity and consumer protection no longer lines up on both sides. So, unless a mutual deal is agreed on financial services in future, the EU no longer permits ongoing passporting arrangements for UK financial businesses and advisers.

Some UK financial firms have put arrangements in place to be able to continue working in an EU country post-Brexit, but others have not. Many expatriates with EU residential addresses have received letters from UK banks, financial advisers and investment institutions advising that they can no longer support them.   

2.     The limits of UK advice

If you still retain UK investments, a UK-based adviser may be able to continue supporting you there. But if you hold savings and investments with an EU-based institution, they may no longer accept instructions, such as top-ups, from a UK adviser. The financial regulator in France, for example, had confirmed it would be illegal for French banks and insurance firms to do business with a provider who is not authorised in the country post-Brexit. Similarly, while the Central Bank of Ireland enabled a three-year grace period for servicing existing insurance contracts, it will not allow unregulated entities to renew or create new policies from 2021.

We can expect similar positions to be taken by other EU regulators seeking to protect consumers in their country, so this could limit the planning opportunities for expatriates using UK-based advisers.

Also, check if there are any practical challenges to keeping a UK-based adviser. Do you have to travel to the UK for meetings and paperwork requirements? Consider how this would work in situations where you need funds quickly or are unable to travel through illness or travel restrictions.

3.     The advantages of local knowledge

As well as the legal and practical implications, consider whether an adviser based in a different country is best placed to help you take advantage of opportunities available to you in France. For example:

·      Do they fully understand the intricacies of the French tax regime and how it interacts with UK taxation?

·      Do they have in-depth knowledge of the French residence, domicile, tax, succession law and reporting rules?

·      Do they know about – and have access to – tax-efficient solutions that offer significant benefits to France residents?

·      Who will pay the bill or face the consequences if they get things wrong?

While UK-based advisers may be experts on the ins and outs of the UK system for residents there, it is unlikely that they have the same in-depth knowledge for another country. 

4.     The suitability of UK planning

Remember: financial planning that is tailored for a UK resident is unlikely to remain suitable once you become resident elsewhere. If you have not yet moved to France, review your arrangements before you do to minimise taxation when changing residency and make the most of tax-efficient opportunities in France.

If you are holding on to UK savings and investments, beware that they can lose their tax benefits once you are living abroad. And once they cease to be EU/EEA assets and you are no longer a UK resident, they could potentially attract a higher tax bill, in either or even both countries. 

Meanwhile, France residents have access to locally-compliant alternatives that can offer other advantages besides tax-efficiency – such as multi-currency and estate planning flexibility – so explore your options. Depending on your circumstances, many British expatriates in France have found that reviewing and adjusting how and where they hold their capital has significantly improved their tax position. 

It has never been more important to ensure your financial affairs are both compliant and suitable for your life in France. Secure financial peace of mind by talking to an experienced, locally-based adviser.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

You can find other financial advisory articles by visiting our website here

Blevins Franks Group Financial Advice - French Succession Law – New Forced Heirship Rules

In August, France approved changes to succession law  which will affect the forced heirship rules applied on French assets. It will allow children to contest a will, even if you opted for UK law to apply to your estate. This could affect the succession planning you set up over recent years.

France’s long-standing Napoleonic code was created to protect the bloodline. Children are protected heirs and must inherit 50-75% of an estate (depending on the number of children).  These rules apply to your worldwide estate if you die as a habitual resident of France, and a will, even a foreign one, will be ignored if it attempts to override these reserved heirship rights. 

Brussels IV
In 2015 there a welcome development for British expatriates who wish to avoid French succession laws.  The European succession regulations (‘Brussels IV’) allow foreign nationals to elect for the law of their country of nationality to apply to their assets on their death, rather than that of their country of residence. Provided this election is made in their will, nationals of many common law countries (such as the UK and US) can avoid forced heirship rules and potentially choose to leave children out of a will.    

France’s new succession rules for French assets 
On 13 August 2021, the French Constitutional Council approved new legislation which will affect the forced heirship rules applied on French assets.

Under the new legislation, if French assets pass according to the provisions of a country which does not impose forced heirship rules – as is the case in England and Wales – the protected heirs (biological and adopted children) can make a claim for the share they would be entitled to under the French rules. 

This means children could challenge the parent’s will and seek for compensation. This would even apply to estranged children who have had no contact with the parent for decades. The compensation mechanism, however, only applies to French assets. 

In summary, the new rules apply where:

·      the deceased individual was either habitually resident in an EU country or a national of an EU country; or

·      the children were habitually resident in an EU country or nationals of an EU country; and

·      the law applied in the will of the deceased individual does not include any forced heirship / protected share for his/her children.

 The new legislation is likely to come into force before the end of 2021 (three months after the publication of the law) and only succession after the relevant date will be affected. 

 At first glance, this new legislation seems contrary to the European succession regulations which override the domestic French legislation. Therefore, there is a strong chance it will be challenged in the European Courts. 

There are also outstanding questions on how the rules would apply. For example, when an election is made to apply the law of Scotland which has forced heirship rules but enables parents to disown children in some circumstances. 

Does this impact you?
Many British expatriates have used Brussel’s IV to avoid France’s forced heirship rules.  Now, under the new rules, if you die as a French resident and have elected, for example, to use English law, if you do not leave your biological children a share of your estate equal to what they would be entitled to under French rules, they can potentially make a claim for their protected share of your French assets.

If you wish to retain flexibility of disposition of assets at death, it is now more important to minimise the value of the assets held in France.  If the new rules are applied on a strict basis (ignoring the European regulations), it will be more difficult to pass your French assets according to your wishes.

This should be considered very carefully when drafting wills in France. French may now not be willing to include the election to use the law of a country with no forced heirship rules. 

The interaction with the Brussels IV rules is not yet clear, and it is likely to take some time to establish how the new rules are applied in practice.

Estate planning for France
Even before this development, we always recommend you should take specialist advice before using Brussels IV as electing for UK law may have consequences you are not aware of.  You also need to watch out for high succession tax rates (up to 60%) if you leave assets to distant or non-relatives.

In any case, there are steps you can take to avoid some of these problems created by France’s succession regime. If you have not yet bought French property, take personal advice before you do as matters may be sorted by simply reviewing how the property should be held. And even what some people think of as obvious answers, such as putting property in their children’s name to avoid taxes on death can have unexpected effects, including actually increasing the tax liability.

Estate planning in France is complex, with the succession law and tax regimes very different to the UK’s. But professional advice and advance planning will make things easier and give you peace of mind, and help ensure the right money goes to the right hands at the right time.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

You can find other financial advisory articles by visiting our website here

Edmond de Rothschild (Monaco) Outlook & Convictions - Are We Headed for a Paradigm Shift?

We are pleased to share with the third edition of Outlook & Convictions, a publication from our Private Banking Investment team. 

Content:

-       editorial by Lars Kalbreier, Global CIO Private Banking
-       Macro forecasts by Mathilde Lemoine, Group Chief Economist, 
-       a presentation of our “5 CE” methodology for selecting high-potential and low risk stocks 
-       our main convictions on asset classes, with a focus on China
-       our megatrends, key growth themes in 2021, including regionalisation.

READ THE PUBLICATION

The past 18 months have been truly extraordinary. The global pandemic has disrupted our lives to an extent which is unprecedented in recent history. Notions such as curfews had last been used during WWII and had all but disappeared from our vocab- ulary. Moreover, civil liberties that we had taken for granted, such as the right to assemble, were se- verely curtailed at the height of the lockdown. Dai- ly activities like going to the office, taking a plane, going on holiday or eating in a restaurant, all be- came much more difficult if not impossible.

The pandemic will most certainly cause some pro- found changes to several aspects of our lives. For instance, the way we work is likely to be different, with more flexible employment models that com- bine both a physical and virtual presence becom- ing mainstream. We might also trade more busi- ness trips for video conferences, etc.

There is another paradigm which the pandemic has affected: global supply chains. Covid has shown how fragile these supply chains can be. For dec- ades, the key trend for companies was to produce goods in low-cost countries, i.e. emerging markets. This meant that parts or finished products had to be shipped across the globe in order to reach their customers. Ever since the pace of the vaccination campaigns accelerated in developed markets with life returning to normal, many manufacturers have faced supply shortages that have exposed the fra- gility of global production chains. Voices speaking out in favour of more localised and regional supply chains so that production can take place closer to the end-consumer are getting louder. In addition, increased scrutiny of the carbon footprint of the goods produced no longer only includes the CO2 emissions from their production, but also their transport. Shipping cheap goods halfway across the globe will no longer be socially acceptable.

In the meantime, significant progress has been made in the manufacturing industry with the help

of new automation processes, robotics and 3D printing, thus significantly reducing the costs of production in locations with higher labour costs. We are convinced this trend will intensify as com- panies and governments are pursuing greater re- gionalisation with increased control over their sup- ply chains. This will provide a boost for investments in manufacturing technologies and the creation of regional champions (page 14).

From a more macro-economic standpoint, govern- ments and central banks have provided extraordi- nary support to the economy and financial markets during the pandemic. This took the form of large government stimulus programmes as well as very accommodative monetary policies as central banks provided abundant liquidity and maintained record low interest rates.

Now that many economies are on the road to re- covery, governments and central banks will need to bring their stimulus measures to an end. This should lead to more volatile financial market condi- tions and slower growth as economies start to nor- malise after experiencing a strong post-pandemic rebound. Investors will need to be more discerning to find sources of yield. Our Megatrends aim to identify these investment opportunities in secular growth themes (page 20).

In this context, selecting equities that provide a good balance between risk and return has become even more crucial for portfolios. Our “5 CE” invest- ment methodology based on the “5 Criteria of Ex- cellence” allows for such a selection. See the main components and the process of this methodology on page 8.

I hope you enjoy reading this edition of Outlook & Convictions.

Lars Kalbreier, CFA

Blevins Franks Financial Advice - Tax Efficient Investing in France - the Benefits of Assurance-Vie

When you look at the headline rates of tax in France, you can understand why many people consider France to be an expensive country to live in, tax-wise.  What they often do not realise, however, is that they may be able to take advantage of compliant opportunities to protect their assets from various French taxes – so much so they may even end up paying less tax in France than in countries like the UK.  With the right structures in place, you could significantly lower your tax bill.  

What was tax efficient in the UK is generally not tax efficient in France.  For example, ISAs and Premium Bonds are taxable in France. 

One very useful arrangement for lowering French tax on your investment income is the assurance-vie.  This specialised form of life assurance allows you to hold a wide range of investment assets and is highly tax efficient for residents of France, especially if you hold your policy for over eight years.  

Both French nationals and expatriates find assurance-vie to be very valuable for providing tax-efficient income (particularly useful in retirement) while also protecting their wealth for their loved ones. 

French tax benefits of assurance-vie

1.     Income and gains can roll up tax-free within the policy

2.     Withdrawals are taxed very favourably

3.     Substantial allowance from year 9

4.     Succession tax savings for your heirs 

5.     Wide range of investment options 

6.     Consolidation of investments in one policy

7.     Estate planning benefits

1) Income and gains

 If you do not take any withdrawals, there is no income or capital gains tax to pay, regardless of how much the capital has grown or how much interest has been earned within the policy. 
 

2) How withdrawals are taxed

When you take withdrawals, they are taxed very favourably.  Only the growth element is taxed, rather than the whole withdrawal.  For example, if the whole portfolio of assets within your assurance-vie has grown by 7%, and you are taking a withdrawal of €25,000, you only pay tax on €1,750 and €23,250 is tax free!   

For new policies set up after 27 September 2017, the tax rate on withdrawals is 30% (the standard tax rate on investment income).  This includes both 12.8% income tax and 17.2% social charges.  The income tax rate is lowered to 7.5% for income from contracts which are more than eight years old and relate to contributions not exceeding €150,000. You can also elect to pay the scale rates of income tax instead, which can work out cheaper even with social charges.  

Note that the 30% fixed rate only applies if your policy is approved for French tax purposes. If you have a non-EU assurance-vie you will pay the scale rates of income tax plus 17.2% social charges, regardless of your premium.  Policies from companies in the Isle of Man, Channel Islands – and now also the UK – are therefore at a disadvantage. 

3) Annual €4,600 tax-free allowance

Once you have owned your policy for over eight years, your first €4,600 –  €9,200 for a married couple – of growth withdrawn every year can be tax-free. This doesn’t apply to social charges but is still a very favourable tax break.  

4) Reducing succession tax

An assurance-vie could also help lower your succession tax liability.  

In particular, considerable tax savings can be made if the policy was established with lives assured under age 70.  Each individual beneficiary will receive a €152,500 exemption, after which they pay a flat tax rate of 20% (when the taxable part of the assurance-vie is under €700,000) and 31.25% on any excess over €700,000. 

If you are over 70 when you set up your policy, your heirs are still better off with your assurance-vie as, although they pay the usual succession tax rates, they receive a €30,500 allowance. 

5-7) Other assurance-vie benefits

 Depending on your policy, you can usually hold a wide range of investment options within your assurance-vie, with flexible currency options. 

You can bring many different investments together under one roof making it easier to manage, and combine your tax and investment planning in one exercise.  

Purchases and sales within the policy are normally transacted at little or no cost, so you can change your investments as your circumstances change without incurring extra costs.  

Investments within an assurance-vie can also be easier to distribute to your nominated heirs on your death, making their life easier. 

It is important to note that there are different types of assurance-vie policies available, and you need to make sure you choose the one that will provide the advantages you are looking for.  Tax rules and rates in France also change frequently so your adviser needs to be up-to-date on the latest regulations in France and what actually works for British expatriates living here.  

Finally, your tax and investment planning should be based around your situation, objectives and estate plans, so it is essential to take personalised advice.

The tax rates, scope and reliefs may change.  Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change.  Tax information has been summarised; an individual must seek personalised advice.  

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

You can find other financial advisory articles by visiting our website here

Blevins Franks Financial Tips - Key Elements for Successful Investing – Creating and Protecting Wealth

What do you need to think about when it comes to creating and protecting your wealth as a French resident?

Drawing the analogy between investment planning and gardening may bring a clearer understanding of the important factors to consider, particularly when you have moved from the UK to France – not everything you have previously planted is the best for current circumstances.  

Investment through the various stages of your life has seasons, as does gardening.   What you successfully planted and grew in the UK may be entirely wrong for France. You have to consider your new, often very different conditions if you are to get your plants to flourish and achieve the results you are looking for.  You then need to carry out regular ‘weeding’ to ensure the long-term growth of the plants you wish to develop and sustain for the future.  

This is all a careful process and often involves professional guidance. A locally based adviser who understands and has years of experience dealing with the local conditions will give you the best results. 

In our view, these are the key aspects that you need to address to ensure you obtain the optimum investment portfolio to suit your particular situation:

Tax and succession considerations - choosing the right tax-efficient structure

A tax-efficient structure, such as an ISA or pension plan in the UK, can keep most of your investments in one place and help you legitimately avoid paying too much tax. You want to ensure as much of your hard-earned wealth as possible is placed in the most suitable structure to limit your tax liabilities. At the same time, consider your estate planning wishes so your investment capital can be passed to your chosen heirs as easily and tax efficiently as possible. 

That was perhaps easier to achieve in the UK where we are accustomed to the rules, but here in France with its complex tax and succession regimes and various reforms over the years, it is sensible to take advice from someone who is well-versed in the nuances of the French systems and how they impact your wealth. 

In France, UK ISA accounts are not tax-efficient and the income and gains generated are fully taxable here as investment income – you will currently pay 30% which covers both income tax and social charges. 

There are, however, compliant arrangements available in France, for example, assurance vie, that provide significant tax advantages as well as estate planning benefits.  There are various assurance vie available though, so you need to choose the most suitable for your circumstances and objectives. 

Establishing your risk profile and optimum portfolio

Most of us recognise that for some of our assets, exposure to market movements gives us a better chance of outperforming inflation and producing real returns over the medium to long term. 

However, the starting point has to be to obtain a clear and objective assessment of your appetite for risk. These days there are some very sophisticated ways of evaluating your risk appetite, involving a combination of psychometric assessments and consideration of your investment aims and other assets.  Since this is an emotional issue, you will benefit from third party professional, objective guidance here.

The key is then ensuring your investment portfolio matches your attitude to risk.  Without such a sound assessment being then matched to the optimum blend of investments, you could find yourself with a portfolio that is too risky or too cautious for you.

Another important initial step in ensuring your portfolio is suitable for you is to establish your objectives. Are you looking for income, growth or a combination of the two? What is your investment time horizon?  Your adviser should help you build a portfolio based on both your risk profile and objectives.

Diversify, diversify, diversify

The higher your concentration in one particular investment type or area, the greater the risk. By spreading across different asset types (such as equities, bonds, property, cash) and then across sectors, geographical regions and companies, you give your portfolio the chance to produce positive returns over time without being vulnerable to any single area or stock under-performing.

You can take diversification further by utilising a 'multi-manager' approach to spread your investments out among several carefully-selected fund managers. This reduces your reliance on any one manager making the right decisions in all market conditions.

Regular reviews 

You should then review your portfolio, usually once a year.  As asset values rise and fall, your portfolio can shift away from the one designed to match your risk profile and objectives.  You may need to make adjustments to re-establish your weightings. With today’s challenging and changing climate, reviews are even more important to help control risk and encourage a positive effect on portfolio performance. 

You also need to consider any changes in your personal circumstances, as well as to tax and succession regulations – particularly in France where the annual budgets can introduce significant tax reforms.

Your investment adviser

Choosing your adviser is another key element of successful wealth management. If you are still using a UK-based adviser there are two issues to consider.

Are your financial arrangements tailored for your life in France or are they actually better suited to a UK resident? 

Brexit dissolved automatic ‘passporting’ rights for UK financial services in the EU, so unless they have made other arrangements, UK advisers, banks and financial providers may no longer able to legally service French residents. If you have UK bank accounts or investments, you may be restricted from making changes, such as moving funds or applying for new services, or they may be closed altogether. 

To bring all these guidelines together, take personalised, quality advice from a regulated, locally-based adviser. With the right strategy in place for your life in France, you can help protect and grow your wealth in real terms – not only during your lifetime but for the next generations to enjoy.

This article should not be construed as providing any personalised investment or taxation advice. Summarised tax information is based upon our understanding of current laws and practices which may change. Individuals should seek personalised advice.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

You can find other financial advisory articles by visiting our website here

Edmond de Rothschild Investment Convictions July 2021 - Reflection On The Year So Far – From Gloom To Boom!

“As we are entering the second half of the year, it is time to pause and reflect on the year so far. Since January, we witnessed a slow but accelerating roll-out of vaccines. As more people were vaccinated and economies re-opened we saw an acceleration of global economic growth. This in turn provided a boost to company earnings and lifted equity markets and other risky assets.”

The second half of the year is likely to be more challenging. Indeed, positive news about the reopening of the economies are now largely priced in and analysts have already revised up company earnings. Moreover central banks will start thinking about reducing their supportive policies now that the economies are re- covering from the pandemic. Read more at the link..

INVESTMENT CONVICTIONS July 2021 (pdf download)

Investment Tips with Corporate Partner Blevins Frank - Why Chasing Star Performers Won’t Guarantee Investment Success

While it may be tempting to choose investments based on past performance, this tactic rarely works in the long term. So how can you put your best foot forward as an investor?

Reading about investing, you will usually find the disclaimer ‘past performance is no indicator of future performance’. While this may seem like a standard get-out clause inserted by lawyers, it serves as an important reminder that nothing is certain in the world of investment.

There is a reason we aren’t all making millions on the stock markets! Financial markets are complicated and unpredictable, with no formula you can follow to ensure you will strike big, or even get out more than you put in. It is important for private investors to carefully manage risk, as investment success often comes down to the sheer luck of being in the right place at the right time.

Given this element of chance, it is important not to get swayed by the latest trend and chase good performance. History repeatedly shows that the best performer one year could be amongst the worst the following year. 

Asset class performance

There have been many examples of ‘star’ assets that have soared before dramatically crashing back to earth. The dot.com bubble famously saw US technology stocks in the Nasdaq Index rise five-fold in the late 1990s before falling 77% in 2002, wiping out billions of dollars. Just recently we have witnessed the less dramatic, but nonetheless volatile, fortunes of bitcoin and other cryptocurrencies change rapidly. 

Essentially, there is little long-term benefit in only picking the latest top-performing asset. If you look at which asset type generated the most returns during a year, you would likely see a different star each month. Take 2019 – the year started with North American equities leading the way, only to move over for UK stocks the next month, then European shares before property took the spotlight. May saw Japanese equities ahead, followed by emerging markets, then Asia-Pacific stocks. UK bonds in varying forms took over for the next four months, before the year ended with cash in the lead. 

Over the ten-year period from 2010, no two years followed the same pattern, and one asset class rarely spent more than one month at the top. Without a crystal ball or a time machine, you could not have picked the right winners every time.    

Fund manager performance 

The same is true of ‘star’ fund managers. With hundreds of funds available from different managers, it can be difficult to know where to turn. While many of them seem to offer similar investment opportunities, the difference in performance can be significant… but often temporary.

Let’s say you had invested £10,000 in a UK-listed shares fund over the ten-year period starting 1 January 2010. If you happened to be in the best performing fund over that period, you would have made a net profit of 440%. Meanwhile, investing in the lowest performing fund would have brought a much reduced profit of 49%. Similarly, the best-performing property fund over that period would have returned profits of 227% versus 72% from the lowest.

On the face of it, it looks like you should just pick the best performing fund. But again, choosing a previously successful fund manager is no way to guarantee ongoing top performance. Statistics illustrate how the performance of the top 25% of fund managers tends to weaken over time. Of the 56 managers in the top quarter of performers in 2015, for instance, only four remained the next year. 

A sensible investment approach

So how can you improve your chances of investment success? There are some key principles you can follow to help manage risk and reach your financial goals.

Diversification is crucial. Spreading your investments across multiple areas is the optimal strategy for minimising risk. This should include a range of different asset classes (shares, bonds, cash, property) as well as geographical regions and market sectors. Diversifying in this way gives your portfolio the chance to produce positive returns over time without being vulnerable to any single area or stock under-performing. You can diversify further using a dynamic ‘multi-manager’ approach, which reduces reliance on any one manager making the right decisions in all market conditions.

It is also important to think long term and have patience when investing. As we have seen, chasing good, quick returns rarely succeeds in the long run. Likewise, exiting a market when it dips would lock in your losses and make you miss any rebounds when markets recover. Research shows that ‘time in’ the market – staying fully invested – is a more successful strategy for investors than trying to ‘time’ the market.

Ultimately, of course, you need to make sure your portfolio is matched to your personal situation, income requirements, goals and timeline, alongside your appetite for risk. This is best assessed objectively by an experienced professional who can then build a diversified portfolio with the right balance of risk/return for your peace of mind. 

For the best results, talk to a locally based adviser with cross-border experience who can bring all the principles together while ensuring your arrangements are structured as tax-efficiently as possible for your life in France. 

All advice received from Blevins Franks is personalised and provided in writing. This article, however, should not be construed as providing any personalised taxation or investment advice. 

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

Our New Platinum Partner Edmond de Rothschild (Monaco) is a Conviction-Driven Investment House Founded on the Belief that Wealth Should be Harnessed to Build the World of Tomorrow

EDMOND DE ROTHSCHILD (MONACO)

We welcome Edmond de Rothschild (Monaco) - a conviction-driven investment house founded on the belief that wealth should be harnessed to build the world of tomorrow.

“As a family-owned Group, our independence enables us to take the long view, to invest alongside our clients and to create brand new financial solutions.

This approach has helped us become a key international player in private banking and asset management as well as corporate finance, real estate and private equity.

Our conviction-driven investment house is also one of the pillars of a wider ecosystem of entrepreneurial, philanthropic and sporting activities that make our mission to be bold builders of the future an authentic one.

Our Group is growing and will continue to grow while preserving the values of our family, which has always staked its name on the service we provide to each and every client.”

Ariane and Benjamin de Rothschild

View the 2021 Group Brochure

EDMOND DE ROTHSCHILD (MONACO)
Les Terrasses
2 avenue de Monte Carlo
BP 317
98006 Monaco Cedex
Website

Iconic Celebrity Hotspot and Luxurious Beach Club Villa Garoupe on Cap Antibes is Now For Sale

La Garoupe, a former Cote d’Azur beach club favoured by the world’s elite, is now for sale with Cap Villas Agency for €10.5m. The property is expected to attract a lot of attention thanks to its unique history, with guests over the years including Winston Churchill, Pablo Picasso, Sean Connery, former U.S. president Harry Truman, the Duke of Windsor, the Prince of Wales, Alain Delon, Ernest Hemingway, and many other esteemed individuals. Until the sale is concluded, Villa Garoupe is also available for rent. 

JFK and friends at the Garoupe Beach Club

Cap d’Antibes is where the Cote d’Azur’s fame began, and this was in part thanks to La Garoupe. Opening to the public as a beach snack bar in the early 20th century, La Garoupe slowly started to gain recognition and attract A-list guests. 

Jeannine Giotti’s family owned the land and the snack bar was her idea, with Giotti playing its charismatic host and becoming affectionately known as ‘The Empress of La Garoupe’. La Garoupe’s reputation was also helped by wealthy American ex-pats Gerald and Sara Murphy, who created a vibrant social circle of elite creatives on the French Riviera, many of whom frequented La Garoupe. 

From the onset of WW1 and well into the 20th century, La Garoupe was an iconic location on the French Riviera. Many celebrities visited and Édith Piaf even hosted her engagement party here.

The current owners acquired the property in 1999 from Giotti, finding their own ‘personal slice of paradise’ at Garoupe beach. The property continued as an exclusive restaurant until 2007, when it was renovated and converted into the unique residential villa it is today. Having enjoyed this legendary property to the fullest, the owners believe it is time for Garoupe’s next chapter.

This beautiful villa is situated in one of the most luxurious corners of the French Riviera. Located on the only natural sand beach in Cap d’Antibesand overlooking a full panorama of the glorious sea and mountains, nearby you will find many amenities, including excellent restaurants and even luxurious palaces.

This villa is unlike any other in its construction and design, has kept much of its original layout from its days as a beach club, including the original beach cabins. The 150m2 interior is reminiscent of being aboard a yacht, featuring a kitchen and living area facing the sea, 4 bedrooms (one with independent access) and a small second level crawl space for children.

Outside there are several areas to lounge in the sun after dipping into the sea or pool. Villa Garoupe has access to a private beach and a pontoon sun deck 15 feet from the water. It is also accessible by yacht, via the 600-foot marina. 

▪ Surface area: 850 m² (incl. 150 m² indoor) 

▪ 4 Bedrooms (suitable for 6-8 people) 

▪ 5 Rooms 

▪ 3 Bathrooms 

▪ Private beach (with a pontoon sundeck) 

▪ Small heated pool & solarium  

▪ 1 Self-catering studio  

▪ Parking for 2 cars 

▪ Yacht-accessible 

▪ Beach cabins 

▪ Style: Californian style 'beach house' 

▪ Exposure: South-East  

▪ View: Panoramic Sea, Alp Mountains (facing Monaco & Italy) 

▪ Air-conditioning 

▪ Location: Garoupe Bay, Cap d'Antibes (Cannes is 12 km away & Nice International airport 18 km) 

▪ Nearby hotspots: Monaco (30 km); Alps mountains & ski resorts (37 km); Italy (45 km)  

Asking price: €10.5m

"From the moment we entered Garoupe beach, we knew we had walked into something special. The property epitomises the romantic history of the French Riviera; the place to be for jet-setters before jets were invented! Located directly on the beach of Cap d'Antibes, this property offers guests a remarkable slice of history and panoramic views of the Mediterranean.”  Emilia Jedamska, Property Manager at Cap Villas

For more information about this property, interviews with the current owners, recent and archived photography of celebrities, or any other questions, please contact Cap Villas. 

UK Pension Benefits - the Lifetime Allowance Limits Explained by Blevins Franks - Wealth Management Advisors

Will your pensions get caught in the lifetime allowance trap? 

By Rob Kay, Senior Partner, Blevins Franks   

If you have several UK pensions, have been saving for many years or have a generous company pension, you could be at greater risk of 25% or 55% tax penalties following recent measures.

One key outcome of the 2021 UK Budget was that the pensions lifetime allowance (LTA) was frozen at its current level for at least the next five years. This measure alone is estimated to net the Treasury approximately £990 million by 2026, pushing an extra 10,000 people over the threshold. With LTA tax penalties as high as 55%, make sure you are not caught unprepared.

What is the lifetime allowance?

Since 2006, the UK government has capped how much you can hold in combined pension benefits without paying extra tax. Originally £1.5 million, the LTA peaked in 2011 at £1.8 million before gradually dropping to £1 million in 2016. Tracking inflation since then, the March 2021 Budget cancelled this year’s scheduled increase, freezing the LTA at its current level of £1,073,100 until at least 2026. 

Who is affected by the LTA?

While the current lifetime allowance of £1,073,100 sounds high, it does not just capture the ultra-wealthy. 

All UK pension benefits outside the State Pension are counted, including everything accumulated over a working lifetime. After decades of pension contributions, compounding interest, investment growth and tax relief, the limit may be closer than you think. 

For ‘final salary’ (defined benefit) pension schemes, the usual measure of value is 20x the annual income due. Generally this will mean those with pensions worth £53,655+ a year would be affected today. 

What are the LTA penalties? 

Once total pension funds exceed the allowance limit, extra tax is payable whenever you access your money – technically called a ‘benefit crystallisation event’. How much you pay depends on the way funds are withdrawn – rates are 55% for lump sums and 25% for income or transfers to an overseas pension. So at best, the cost of being over can be a quarter of your funds, at worst: over half. Note that this is on top of any other tax payable. 

Being non-UK resident offers no protection. Usually, under the double tax agreement, residents of France are not liable for UK taxes on British pensions (except government service pensions). However, for anyone over the allowance, these rules do not apply – the LTA tax is applied in the UK first and cannot be claimed back. 

How can you check your LTA position?

Calculating how much of your allowance you have used is not always straightforward, especially for final salary pensions, so check your position with your provider or pension adviser.

HM Revenue & Customs (HMRC) will first test your allowance status when you start drawing your pension, then every time you access funds and when you turn 75. If you die before 75, any lump sums paid to your beneficiaries will also be subject to the LTA test and subsequent tax penalties. 

How can you protect your pensions?

While it is possible to obtain ‘protection’ from HMRC to secure a higher limit, be aware that strict conditions apply, so take guidance.

Expatriates have the option of transferring UK pension funds to a Qualifying Recognised Overseas Pension Scheme (QROPS). If you transfer one or more UK pensions into a QROPS and your total benefits are under £1.073 million, you will not face LTA taxes on the transfer. However, make sure the QROPS is within the European Economic Area (EEA), otherwise you would still lose 25% through the ‘overseas transfer charge’. 

Once in a QROPS, funds are out of reach of LTA penalties, no matter how much you have or how you access it. A suitable QROPS can also provide tax-efficiency, currency flexibility and estate planning benefits. 

An alternative option is to explore taking your UK pension as cash and reinvesting it into a tax-efficient French-compliant arrangement. Again, this can unlock other benefits not usually available with UK pensions.

Reviewing your options 

Before making any major pension decisions, it is crucial to take regulated, personalised advice to avoid pension scams and determine the most suitable approach for you.

What if you are already over the limit? While you would trigger an immediate 25% LTA charge on a QROPS transfer, the funds become immune to further penalties. If you instead transferred to a UK scheme, like a Self-Invested Personal Pension (SIPP), you would not trigger immediate taxation but the funds would remain liable – with future charges increasing as funds grew. The 25% or 55% LTA penalties would then become payable whenever you take benefits and also apply to any heirs inheriting the pension.

If you are close to the threshold, consider acting sooner rather than later. Your pension funds should continue to grow while the lifetime allowance remains frozen, so you could potentially avoid unnecessary taxation by taking steps now.

Even if your pension benefits are within the allowance or you are not yet ready to access them, it is a good idea to review your situation. A regulated adviser with cross-border experience can help you explore your options and take advantage of tax-efficient opportunities to help secure a comfortable retirement in France.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice. 

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

Declaring Your Income Tax in France - Deadlines And General Advice From Our Corporate Partner Blevins Franks

Income tax return time in France 2021

By Rob Kay, Senior Partner, Blevins Franks 

For those of you who were a resident of France in 2020, it is now time for the annual tax return for income and gains made during the calendar year 2020.

 For those who arrived in France from the UK during last year, you will, in theory, be declaring your income and gains from your date of arrival in France until 31st December 2020.

You are taxed as a ‘household in France, so a married couple is taxed together, for instance.

In France, income tax declarations generally need to be submitted around the end of May/beginning of June, with the dates varying slightly each year.  The online portal for 2021 opened on 8th April and the submission dates have been published.  

Deadlines dates for online and paper declarations

Everyone should now file their income tax return online, on the government portal  www.impots.gouv.fr, unless you have a genuine reason for not being able to do so.  

The dates for online declarations vary according to which department you live in:

01-19
Midnight Wednesday 26 May

20-54
Midnight Tuesday 1 June

55-976
Midnight Tuesday 8 June

Non-residents
Midnight Wednesday 26 May

IIf you have no internet connection or struggle with online forms due to age or a disability, you can submit a paper return. Paper returns can be obtained from your local tax office or downloaded from the ‘impôts’ website, once available.

Moreover, for those of you who are submitting your first return, you may not have received the necessary codes to be able to set up your ‘personal space’ on the tax portal. You can go on the website www.impots.gouv.fr and on the ‘espace particulier’ page to get your login code and your tax number if you don’t have one. You can also contact your relevant ‘service des impots’ to obtain your tax number.  If you cannot make on online declaration, your first return will have to be in paper form.

The deadline for paper returns is earlier than online returns, on Thursday 20th May (for both residents and non-residents).  It is the date of the postmark on the envelope which is used to verify whether you have submitted on time! If you submitted an online return last year, you will no longer receive a paper one in the post.

The big difference this year is that a large number of taxpayers will not have to complete a declaration at all, unless their situation has changed since last year.

However, normally only those who only receive French salaries or pensions are exempted from completing a return. Anyone with income from abroad will almost certainly have to continue to file every year.

Income tax rates

Income tax is payable on earnings, pensions and rental income, and you are taxed as a household rather than an individual – the parts familiales system, which can prove beneficial. 

Taxes are declared in arrears, so your 2021 return needs to report the income you earned last year. The tax rates for 2020 income are:

Up to €10,084 – 0%
€10,085 to €25,710 – 11%
€25,711to €73,516 – 30%
€72,517 to €158,122 – 41%
Over €158,122 – 45%

There is an additional 3% for a single person where income is between €250,000 and €500,000 per part (nothing is due from a family) and 4% for income exceeding €500,000 per part for an individual, reduced to 3% for a family (up to a limit).   

Various deductions are available, so make sure you are using all the ones you are entitled to.

Tax on investment income – the Prélèvement Forfaitaire Unique (PFU)

Investment income, such as interest, dividends, capital gains and gains from life insurance policies/non-French assurance-vie, is currently taxed at a fixed rate of 30% rather than the scale rates of income tax.  This includes both tax and social charges, so it is beneficial for those with higher investment income.  

Households in low-income brackets can opt for the progressive income tax rates (plus social charges) so they are not taxed more under this system. 

Unless you are a low-income household, you need to declare interest or dividends received from abroad within 15 days of the month end and pay the 30% tax. This is then offset against the tax due on your tax return.  

What you need to declare 

French tax residents are liable to French income tax on their worldwide income and gains, so you need to declare all income you earn in the UK and anywhere else outside France, whether it is pension, rental or investment income. 

You will not, however, pay tax twice on income that is taxable in the UK. Under the terms of the France-UK double taxation treaty, UK government service pension and rental income are only taxable in the UK. However this does not mean that you do not declare it in France – you must include it on your French tax return. You will then receive a credit equal to the French income tax and social charges.

Real estate gains are liable to tax in both countries, but you receive a credit in France for UK tax paid.   Gains made on the disposal of capital investments are generally taxed in the country where the seller is resident.  

Remember that if you are resident in France you are also obliged to declare all your foreign bank accounts and non-French life insurance policies, even if you do not earn an income and/or they are dormant. This is done when you submit your annual tax return, using a separate form.  The penalties for failing to declare accounts were increased in 2018, so don’t forget about any old accounts. 

Non-residents of France need to submit a tax return listing all income earned in France (eg, rental income). 

Social charges

Social charges are paid on top of income tax, and for 2020 income generally range from 9.1% to 17.2% depending on the type of income.  

They are usually calculated based on the income declared in your income tax return and the authorities will send notification of the amount payable in the autumn, along with your income tax assessment.  

Exchange rate

When converting your regular Sterling 2020 income (such as pensions for instance) to Euros for your tax return, you can use the rate from the Banque de France, which is £1 = €1.125. 

This article is a brief summary covering the basic elements of income tax in France.  It is important to seek personalised, professional advice. For questions about completing your tax return, speak to your local tax accountant. 

If you have any general questions about taxation in France and how you may be able to lower your tax liabilities, please do not hesitate to contact Blevins Franks.  Our advisers are cross-border tax and wealth management specialists with in-depth knowledge of the French tax regime and the compliant tax planning opportunities available here.

The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual is advised to seek personalised advice.

Blevins Franks Group is represented in France by the following companies: Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists. Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). This promotion has been approved and issued by BFWML.

You can find other financial advisory articles by visiting our website here

The Latest 2021 UK Budget - What Are The Implications For Expatriates?

While there was little in the way of immediate changes in the latest UK Budget, the freezing of some allowances is set to increase tax bills in the long run. 

This year’s UK Budget predictably focused on ongoing pandemic support, bringing very few changes to personal taxes. Chancellor Rishi Sunak did, however, introduce some longer-term measures to collect more tax by freezing the main allowances and exemptions for the next five years. 

According to the Office for Budget Responsibility (OBR), the overall impact of these measures will be that the UK’s tax burden will rise to its highest level since the 1960s! 

So what changes in April may affect UK nationals living in France, and what can you do to minimise any negative impact?

Income tax

UK taxpayers (including non-UK residents) see a slight increase to the personal income tax allowance thresholds at each end: £12,570 at the basic 20% tax band and £50,270 at the higher 40% rate. However, these will be frozen until at least April 2026. 

This is estimated to bring 1.3 million more people into income tax liability, with one million more paying the higher tax rate, altogether netting an extra £8 billion in the 2025/6 tax year. 

Savings and investments

The band of UK savings income that can be earned tax-free stays at £5,000 and the annual ISA subscription limit at £20,000 (£9,000 for a Junior ISA). 

The dividend allowance remains at £2,000.

Remember: investments like ISAs may become taxable in France once you are non-UK resident. Take time to explore alternative arrangements that may be more tax efficient and better suit your circumstances, goals and risk appetite.

Capital gains tax (CGT)

As with income tax, the annual allowance will be frozen for the next five years. Unlike income tax, the CGT allowance does not increase, staying at its current level of £12,300 for individuals (£6,150 for most trusts). 

Despite expectations that CGT rates would be aligned with income tax rates, there is no change here, so rates remain between 10% and 28%.

Don’t forget that, in recent years, non-UK residents became liable for capital gains tax on most UK property and land.

Pensions

Annual allowance: This remains at £40,000 – as it has been since 2016 – and starts reducing once ‘adjusted income’ reaches £240,000.

Lifetime allowance (LTA) – This will not increase with inflation as planned so remains at £1,073,100, where it sticks until at least 2026. 

If your combined UK pension benefits are near the LTA threshold, you need to consider the potential impact of future growth. If investment markets recover in line with the Chancellor’s forecast that the economy will return to pre-pandemic levels by mid-2022, this could bring many more pension funds within the scope of the LTA’s 25% or 55% penalties. The Treasury expects to collect an extra £250 million as a result.

QROPS – There were no changes to Qualifying Recognised Overseas Pension Schemes, with transfers to EU/EEA-based QROPS still tax-free for EU residents. The 25% ‘overseas transfer charge’ continues to only apply to transfers outside the EU/EEA. But now the UK has left the bloc, this could potentially be extended to capture EU transfers in future. 

Once in a QROPS, UK pension funds become immune to LTA penalties and future changes to UK pension rules while unlocking other benefits, so carefully consider your options here. 

Inheritance tax

Despite much anticipation that this year could see inheritance tax changes, again the only action was freezing the exemptions, allowances and reliefs for the next five years.

The tax-free ‘nil rate band’ allowance stays at £325,000 per person (unchanged since 2009!) The residential nil rate band (RNRB) – which provides extra tax relief when passing on a main home (including overseas) to direct descendants – remains at £175,000 per person.

The Treasury collected £5.2 billion in inheritance taxes in the 2019/20 tax year. With these latest freezes, they expect to generate an additional £15 million next year, increasing to £445 million by 2026.

What can you do to minimise the impact?

Although this new tax year brings relatively few changes, there are longer term implications. The Chancellor’s strategy of freezing allowances, exemptions and reliefs is clearly designed to raise more tax revenue as people’s income, capital gains, and asset values grow. Taxpayers may also feel the pinch as the cost of living increases over time. 

Wherever possible, you should make full use of the available allowances each year to help minimise your tax bill. However, no one action in isolation will make a substantial difference. You need to make sure your overall financial arrangements are structured as tax efficiently as possible for your life in France to help minimise exposure for you and your heirs. 

As always, subsequent Budgets can change the current trajectory by introducing new taxes with little notice, but this is especially likely as the economy picks up and the government looks to recoup its pandemic spending.  

This is a good prompt to think ahead and review your tax planning to check you are making the most of all the available tax-efficient opportunities, in the UK and your country of residence. For the best results, take personalised advice from a cross-border specialist with understanding of both the UK and French tax regimes.

Rob Kay, Senior Partner, Blevins Franks

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML.

You can find other financial advisory articles by visiting our website here

Our Latest Corporate Partner Rental St Tropez Offers an Established and Reputable Property Management Service for Rental Clients and Second Homeowners

RENTAL ST TROPEZ

“For over 10 years now we have been working on Villa Rentals & Property Management in the Golfe de St Tropez.  We are based at Port Grimaud and have extensive knowledge of this region enabling us to ensure our guests make the most of this wonderful area during their stay.

We have a large variety of Villas from high end luxury Villas to mid-range family holiday homes, giving our clients plenty to choose from and as we know each property individually, we can be confident we can give them a wonderful holiday experience.

At Rental St Tropez we work closely with property owners, management teams and pride ourselves in advising and assisting them in every aspect of the rental process. We can also offer management services for rental clients and second homeowners.

Over the years our business has evolved, and we have established a good client and partner base.  We have also developed a concierge service where we are happy to organise limo/helicopter transfers, security & catering services plus any other requirements our guests may have.  We can tailor make your St Tropez holiday to fit you.”

Contact: +33 678 850 802

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EU Post Brexit - Why It’s Time To 'Think Local' For Your Financial Planning In France

Now that Brexit is here, EU-resident Britons with UK bank accounts, investments or a UK-based financial adviser may see accounts closed or face restrictions. In these times of widespread restrictions and lockdowns, our worlds have become a lot smaller. Whether this will have a long-term effect on your travel, lifestyle and shopping habits will be a personal matter. But with Brexit now in full flow, UK nationals living in France have good reason to permanently ‘think local’ when it comes to financial arrangements. 

Just as UK citizens lost automatic EU freedom of movement when Brexit took effect on 1 January, many UK financial businesses lost the right to provide banking and investment services within the EU. If you are resident in France but still use a UK bank account, other financial products or a UK-based financial adviser, make sure you check where you – and your money – stand.

UK financial services and Brexit 
Before Brexit, UK firms providing financial services to Britons living in the EU could legally do so through ‘passporting’ arrangements. This meant UK providers – enforced by the Financial Conduct Authority (FCA) – were committed to meet the same minimum standards and consumer protections for EU residents as other EU states. 

But now that the UK (and the FCA) are free to make their own rules, the EU has no assurance that UK firms will meet their requirements. Consequently, on 1 January, the EU withdrew passporting rights for UK firms ­– including banks, insurance companies, investment providers and financial advisers. Now, some could even be breaking the law by working with EU residents.  

Does this affect all UK financial firms?
This depends on various factors, including how a company is structured and where it is based. Those with headquarters in an EU country, for example, can retain their passporting licence and continue operating as before. 

However, wholly UK-based firms who want to support EU-resident clients will likely need to restructure and form agreements with the financial regulators for each EU/EEA country they operate in. This is a highly complex, expensive and time-consuming process, so not a cost-effective option for all.

Negotiations on financial services are ongoing, so it is possible that the UK and EU may still reach an arrangement in this area. Some companies may be holding out for this before going through the potentially unnecessary expense of restructuring. Others have already withdrawn from EU markets. 

Some major UK banks have informed EU-based clients that they cannot provide services for them post-Brexit and closed their accounts. Other providers have kept accounts/policies open but suspended activity, or are allowing them to run until the end of their term.  

How might this affect you? 
If you hold a British bank account, insurance policy, investment or other financial product and your provider hasn’t contacted you about limited services, ask them what arrangements they have in place for France. 

If your account has not been closed, has it been frozen? In some cases, while you may be able to retain existing accounts and make withdrawals as an EU resident, you may be restricted from adding or moving funds or renewing policies. You may also be unable to apply for new services, such as term deposits, bonds, foreign currency management, loans, credit cards and mortgages. 

If you still use a UK-based financial adviser, check they have the authority to continue supporting you as a French resident. Besides the legal implications – and whether you are protected if things go wrong – some financial institutions have stopped accepting instructions from UK-based (unregulated) providers. So if you hold EU-based investments, your planning options may be significantly limited with a UK adviser. 

Post-Brexit financial planning for France
Even if the financial services issue does not affect you, there are other key benefits to thinking more local for your finances. 

Still holding on to UK savings and investments? Now that UK assets are no longer EU/EEA assets, they could potentially attract a higher tax bill within the EU. ISAs are also taxable in France for non-UK residents. Own UK property? Remember: EU residents are still in the firing line for UK stamp duty and capital gains tax.

Meanwhile, French residents have access to opportunities that can offer better tax-efficiency and other potential benefits, so make sure you review your options.

What about UK pensions? This is not so straightforward. You may be better off leaving them in the UK and drawing income as needed in France. However, while Brexit does not affect the ability to receive UK pension income into an EU account, it will always be paid in sterling, so the value could be adversely affected by exchange rates and conversion costs. Explore whether it may be more beneficial for you to transfer funds out of the UK into a tax-efficient structure for France. Doing so could also unlock currency flexibility and estate planning benefits, but be sure to take specialist, regulated advice to do what’s right for you.

With Brexit bringing such a seismic shift in the landscape, it has never been more important to ensure your financial arrangements are compliant and suitable for your life in France. A specialist, locally-based adviser is best placed to help you take advantage of suitable opportunities here and secure financial peace of mind for you and your family.

Blevins Franks is fully authorised to provide advice in France.  Our financial advisers live and work locally and have in-depth knowledge of the local tax and succession regimes and common issues faced by UK expatriates. Contact us to discuss how we can help you with your investments, pensions and cross-border tax and estate planning.

By Rob Kay, Senior Partner, Blevins Franks

Blevins Franks accepts no liability for any loss resulting from any action or inaction or omission as a result of reading this article, which is general in nature and not specific to your circumstances.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML.

You can find other financial advisory articles by visiting our website here

Planning for Retirement - It Is Never Too Early To Start Thinking About How You Will Finance Your Golden Years

Whether you are nearing retirement or it is several years away, it is never too early to start thinking about how you will finance your golden years. Even if you are already retired, you should regularly review your arrangements to ensure you continue meeting your retirement goals. It might be that you enjoy spending time in France or Monaco and would like to retire in the sun, now or a few years down the line. Or maybe you are already living here and are unsure what your options are. Whatever your situation, what do you need to think about to secure the retirement of your choice?

Why retirement planning matters at any age 
By Rob Kay, Senior Partner, Blevins Franks

Approaching retirement

Even if retirement is a way off, there are certain things you need to consider – the earlier the better – to make sure you are on the right track financially. There may be steps you can take today to help make your dream retirement a reality.

Questions you should ask include: 

·      Will I be able to afford to retire when I want to?

·      What is the best strategy for withdrawing from my business or employment?

·      What options do I have for my pensions? Are they likely to change?

·      Will I be able to retain my existing wealth and assets?

·      Do I want to spend some or all of my retirement abroad?

Let’s say that you plan to retire within the next five years and move permanently to France. You may have concerns about whether you can afford your preferred lifestyle without having to sell existing assets. You may not want to have to downsize your home, for instance, as you would like this to eventually pass on to your family. Perhaps you have a business to sell and are unsure how best to convert your years of hard work into a retirement nest egg. Then there are the complex residence and tax implications of living in a different country.

Here, professional financial advice can prove invaluable. An adviser can take a holistic view of what you have– your savings, investments, assets, pensions – together with what you want – your timeline, income requirements, legacy wishes – and an objective assessment of who you are – your circumstances, goals, risk appetite – to design a personalised retirement plan for you. 

Already retired

If you have already reached retirement age or stopped working, that doesn’t mean you should forget about retirement planning. After all, you could be retired for thirty years or more! 

Regular reviews allow you to adapt your strategy to suit your changing circumstances and goals, such as incorporating new family members, addressing health issues or relocating. It also enables you to keep up with the ever-changing tax and pensions landscape, including new opportunities that could work in your favour.  

Your pension options

Pensions are usually the foundations of retirement, so deciding what to do here may be one of life’s most important financial decisions. Pensions are complex anyway, but with greater freedom and choice than ever – and an increase in sophisticated pension scams – you must take extreme care.

You might benefit from consolidating several UK pensions into one to provide a coherent, more cost-effective investment platform for your retirement income. However, this may not be the most tax-efficient approach if you live in France. By receiving pension income in sterling, you would also be exposed to conversion costs and exchange rate risk.

Britons resident abroad have the option of transferring UK pensions to a Qualifying Overseas Pension Scheme (QROPS). Doing so can unlock advantages you do not always get with UK pensions, such as flexibility to take income in euros and more freedom to pass benefits to chosen heirs. Transferred funds would also be protected from UK lifetime allowance charges and future UK pension rules that may adversely affect you – an increasing possibility after Brexit.

If you transfer UK pensions to an EU-based QROPS as an EU resident, you can currently do so tax-free, but transfers outside the EU/EEA invite a 25% UK tax penalty. Once outside the bloc, the UK government could potentially widen this taxation net to capture EU-based QROPS in the future. 

Transferring is by no means a one-size-fits-all solution and the benefits of a QROPS can vary greatly between providers and jurisdictions. Be sure to take regulated, specialist advice before making any significant pension decision to protect your benefits and establish the most suitable option for you.

Retiring abroad

If moving permanently to France is on the cards, it is especially important to review your retirement strategy early. Not only will you need to consider your residence status and cross-border tax implications in a post-Brexit world, you will need to adapt your estate planning to suit the very different local succession rules. 

In any case, careful planning is the key to minimising taxation and maximising the available opportunities so that you can enjoy the retirement you want for as long as you need. For the best results, take specialist, cross-border advice.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

You can find other financial advisory articles by visiting our website here

Strategic & Effective Financial Planning for the New Year with Corporate Partner Blevins Franks

Strategic Financial Planning for the New Year
By Rob Kay - Senior Partner Blevins Franks

Of course, you can review your financial planning any time to ensure it is on the right path, but the New Year is the perfect prompt to do so if you have not taken a fresh look at it for a while.  And perhaps it is even more important this year as we navigate a post-Brexit world.

One key reason to review your wealth management is to ensure it is up to date. Establish whether any tax rules or financial regulations have changed, and consider if developments in your personal and family circumstances mean you should adjust previous arrangements.

But an effective review of your financial planning, to ensure it is suitable for your life in France and your wishes for the future, needs to go beyond that.  

The benefits of strategic planning
Many people only consider segments of their finances at a time. They may have bought shares in companies they like and/or invested in funds recommended by a financial adviser years ago.  They may speak to a tax accountant to learn about French taxation and perhaps ask about tax planning opportunities.  Then they speak to a lawyer about setting up a French will.  At some point they will look at their pension funds and try and work out how best to access their retirement savings. 

For truly effective financial planning, however, you need to consider all these various aspects together.  For example, how you hold your investments can make a difference to your French tax liabilities.  Estate planning in France is no simple matter, with its complex succession tax regime and forced heirship rules, and how you own assets can impact on what you can achieve.  And when deciding what to do with your pensions, look at all your retirement savings and what income they can generate for you.

Here is a summary of three key areas you should consider in your financial planning review. 

French residency and taxation 
The fact that you are resident in France, rather than the UK, has a significant impact on your financial planning. First of all, make sure you know where you are resident for tax purposes, especially if you are new to France or spend time in both countries.  The French and UK tax residence rules can be more complex than first meets the eye. The double tax treaty determines where you pay tax if you are resident in one country and earn income in the other. 

Regardless of how effective your tax planning in the UK was, you pretty much need to start afresh in France. What was tax efficient across the Channel is unlikely to be tax efficient here. Have you explored all the compliant arrangements that provide tax benefits in France?  Assurance-vie, for example, can provide a range of advantages that go beyond lowering your tax bill.

Estate planning
Do not leave estate planning to the final stage of financial planning.  The way you own property and investments in France makes a difference to how you can distribute your assets on death and how much tax your beneficiaries pay. So take this into consideration when buying assets and setting up investment arrangements. 

Succession law in France protects children over your spouse.  This can have unwelcome consequences for families with children from previous marriages, unless you plan ahead. UK nationals can use the EU regulation – ‘Brussels IV’ – to distribute their estate under UK law, but do research this first as it may not be the best solution for you. 

Financial structuring for life in France 
Perhaps the key rule for financial planning is that it must be specifically structured around your personal circumstances – your lifestyle today and plans for the future, family situation, income requirements, objectives, time horizon and risk tolerance. 

If you do not already have a strategic financial plan in place for France, you may need to take a completely fresh look at all your savings and investments and consider if they are suitable for you today and the current economic climate, for example:

Are they too risky? 
Do you have adequate diversification?
Can they provide income without risking the capital? 
Could you consolidate shares and funds so they are easier to manage? 

Tax liabilities
And, at the same time, consider your tax liabilities on investment income and gains and whether you could use alternative tax-efficient arrangements to hold your investments.  And how will these savings be passed to your heirs? What inheritance taxes will they have to pay? Can the funds be passed on directly or will there be a lengthy probate process?

Some assurance-vie allow you to hold your choice of investment assets while providing tax and estate planning benefits. There are various ones available so choose the one that works for you.

Securing the best results
Every family is different. Your strategic financial planning must be carefully designed for you. All the various aspects should work cohesively together to create an overall wealth management plan that provides long-term financial security for yourself and achieves your wishes for your heirs.  

For peace of mind that you have covered everything, that you have understood the intricacies of French taxation and not missed out on tax planning opportunities, and that making one financial decision will not have unexpected consequences on another, take expert, professional advice, ideally from a locally based cross-border wealth management specialist. If you still use a UK-based financial adviser, confirm that they can continue to provide services to you in France after Brexit. And as is always the case, your adviser should take the time to get to know you to then outline personalised recommendations for you. 

The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual is advised to seek personalised advice.

You can find other financial advisory articles by visiting our website

The Resilience of the Rock - Monaco’s Property Market Weathers the Global Storm

2020 is drawing to a close and we are taking stock of this extraordinary year. Monaco is still open for business though who would have imagined a year ago that we would be wearing masks outdoors and dispensing with the usual handshakes when meeting someone? 

The year has been deeply troubling and 2021 may well throw up further surprises. The world is a different place for sure. What has been heartening in our line of business is to see how resilient the real estate market in Monaco has been, despite lockdowns, curfews and travel restrictions. We are still open for business and November has seen interest from all quarters.

The official stats for the first six months of 2020 came out some time ago: the third quarter’s figures are not yet published. Interestingly the number of re sales (i.e. properties over 5 years old) for the second quarter of 2020, was absolutely identical to the number completed in the second quarter of 2019, and this despite the 2020 lockdown. Pretty remarkable…

And demand continues. We are seeing a good number of requests for smaller investment properties: studios or one beds. There is quite a good selection on the market currently, possibly because previously occupants have decided to rent or buy larger properties post-lockdown. And we believe that the right smaller property can take on value even in difficult times, particularly if it can be renovated and made into a turnkey property. 

The apartment we have for sale in Le Bristol is a case in point. It is located on the Grand Prix circuit and nicely refurbished, it makes a great rental property. 

And if anyone out there is thinking of selling, we are very much looking for larger properties too for various clients: please do get in touch!

Article by Irene Luke . Partner at Savills Monaco

Benefit from Expert Financial Advice with our Corporate Partner Blevins Franks - Specialists in Strategic Financial Planning

BLEVINS FRANKS - SPECIALISTS IN STRATEGIC FINANCIAL PLANNING

If you’re a UK national living in France or planning to move here permanently, you will benefit from expert advice to make the most of your wealth and minimise taxation. 

Blevins Franks has 45 years’ experience providing cross-border tax, pensions, estate planning and investment advice to British expatriates across Southern Europe. Advisers and support teams live and work throughout France, Monaco, Spain, Portugal, Cyprus, Malta and the UK to provide a local, personalised service.

The Local Team
With an office in the French Riviera for over two decades, Blevins Franks is well-established in the region, providing a genuinely holistic approach to financial planning on your doorstep.

View the Blevins Franks Corporate Feature